Hillgrove Resources has parted ways with its Kanmantoo copper mine operator Exact Mining Services.
Production at the mine, 55 kilometres from Adelaide, will reduce to around 60 per cent and take at least six weeks to resume normal operations.
Hillgrove shares went into a trading halt on Wednesday.
Hillgrove Resources Limited said in a statement to the stock exchange Friday morning it “is finalising a settlement agreement with Exact Mining Services Pty Ltd to allow a mutual termination of the Mining Services Contract at the Kanmantoo Copper Mine”.
“As a result Exact will be leaving the Kanmantoo mine site immediately upon finalisation.
“The Company has been in negotiations with the current contractor Exact with regard to the Contract for the provision of mining services at the Kanmantoo Copper Mine,” the statement said.
“As of Friday 26 July, Hillgrove and Exact are concluding a settlement agreement of the Contract, and arranging for Exact to finish on site.
“Hillgrove has in place alternate contract arrangements to continue ore feed into the plant from run-of-mine and low grade stockpiled material to maintain mill throughput, and produce copper at approximately 60 per cent to 70 per cent of nameplate capacity.
Hillgrove Resources Managing Director Greg Hall said the compnay had already been in the marketplace looking for alternative mining services suppliers.
“Hillgrove has secured quotes for replacement mining services at competitive prices.
“The Company will also be using this situation as an opportunity to further review its mining and technical arrangements to reduce mining costs at Kanmantoo and to implement process and production improvements,” Hall said.
Stay informed, daily
“Hillgrove views this as a short-term transition to a stronger, more competitive outcome for the Company and shareholders.
“Through this changeover process the Kanmantoo Copper Mine is forecast to remain cash flow positive.”
The compnay said that it will update the market further with details of the replacement mining services arrangements when they are finalised.
Hillgrove shares dipped in early trade Friday morning.
Want to see more stories from InDaily SA in your Google search results?
- Click here to set InDaily SA as a preferred source.
- Tick the box next to "InDaily SA". That's it.
